When will the real estate market bounce back?

Don't expect a guaranteed answer to that question, but it is one that everyone connected to this industry is trying to answer. One thing we do know is that no matter where you are in the economic spectrum of the US economy, no one has been exempt from the drop in values of real estate. There are many owners in the Vail Valley who never used a mortgage and therefore have not been affected by increased mortgage payments, but even cash buyers have seen the affects of a weakening home value. On the other hand, the run up in values of real estate over the past three years had to come to a halt at some point, it always has in the 30 years I have been in the business, and usually happens in eight year cycles. As I have pointed out in earlier blogs, we have seen a 40% drop in number of transactions over the past 12 months. Even though the median price of real estate remained high last year, that was attributed to contracts that were signed as much as two years prior for units like the Arrabelle. Units that are under construction right now may not have the same such good fortune.

What makes the Vail Valley such a special place to own real estate is that people come here for the life style, the beauty of the mountains and it is limited in the number of projects that can be built in a narrow mountain environment. The Vail and Beaver Creek ski areas provide a unique experience you can not find in many other mountain towns, and that alone will keep Buyers coming back to buy a piece of that lifestyle. Right now there is a bit of disconnect between what Sellers think their property has increased by and what Buyers think they have to spend to own property here. When the initial signs of this national recession hit home, a lot of Buyers just disappeared. Now the ski season is here, all of the Brokers in the Valley are finally starting to see Buyers show up again. We are still not of the woods because the lookers are not necessarily making offers or writing contracts. So, we are all looking for the equilibrium that will provide the incentive for Buyers to feel confident their offers will be accepted and appraisals will reflect a rising trend again. No area of the country is 'bubble proof', but everyone in this Valley seems to feel we have seen the worst of the recession and that we are lucky it was not any worse than it has been in other areas.